DoT Slaps Rs 100 Crore Fine on Vodafone India

DoT has slapped 100-crore fine on Vodafone India for providing Subscriber Local Dialling (SLD) services in two regions between 2003 and 2005.

MUMBAI: DoT has slapped 100-crore fine on Vodafone India for providing Subscriber Local Dialling (SLD) services in two regions between 2003 and 2005. SLD is a facility that allows roaming customers to be on the local network and thereby avoid paying roaming and STD charges. A similar fee was imposed on Bharti on May 30.

While Bharti was charged 650 crore for 13 regions, the maximum penalty of 50 crore per service area has been imposed on Vodafone for Mumbai and Delhi, only, according to a DoT note, reviewed by ET.

The Department of Telecom had directed Bharti and Hutch (now Vodafone) to stop providing this facility in June 2003, as it violated the national routing plan and helped companies avoid a levy charged with every long-distance call. However, the Hutch continued offering this service till 2005, the note said.

The note that approves issuance of a show-cause notice to Vodafone did not require clearance from telecom minister Kapil Sibal as the precedent had already been set when the Bharti note was cleared, said an official.

The Vodafone spokesman declined comment. An executive close to Bharti had said the telco had offered this facility to benefit consumers by lowering their bills. "There was no revenue or profit gain to Bharti by offering this facility to its customers," this executive had added when the note to fine Bharti was cleared.

The fine comes among a spate of fines imposed by the telecom regulator, but is the another one inherited along with the acquisition after the mammoth tax case that Vodafone has been fighting.

Vodafone had acquired the India business from Hutchison Whampoa in 2007 for $11 billion. The Indian taxman has charged Vodafone $2 billion of withholding tax it should have held back from Hutchison. Vodafone and the Indian government are in conciliatory talks to resolve the matter.